FreddieMac.com
Skip to content
September 08, 2016

Myth vs. Fact: Down Payments

Homeownership
Myth vs. Fact: Down Payment

Down payment requirements are one of the biggest misconceptions in the market. Today we're debunking the top 2 myths.

Myth: I must put down 20%.

Fact: This is perhaps the biggest myth in the market. Today borrowers can get a conforming, conventional mortgage with a down payment of as little as 5%. Most homebuyers are putting down between 5 and 10%. In fact, last year nearly a third of the 1.6 million loans that Freddie Mac funded were to buyers putting down less than 20%.

And some products, such as our Home Possible AdvantageSM mortgage, require a down payment as little as 3%. You have choices when it comes to your down payment so talk to your lender about what makes the most sense for you.

Myth: Down payments have to come from your own funds.

Fact: Not necessarily, it depends on the program. For example, qualified borrowers can further reduce their 5% down payment coming out of their own pockets to 3% by lining up gifts from family or grants or loans from non–profits or public agencies.

Down payment assistance is the real deal. Thousands of dollars of home buying assistance are out there for qualified homebuyers like you. Every state, and many cities and counties, offers practical down payment assistance programs for qualified borrowers. A directory of these programs is available online through the U.S. Department of Housing and Urban Development (HUD).

Our Home Possible Advantage mortgage allows the 3% down payment to come from different sources, including personal funds, gift funds, grants and affordable second mortgages.

Get the low down on down payments and PMI.

Read other posts in our Myth vs. Fact series:

  • Feedback

    Have a comment or question about this post? Email us to let us know what's on your mind.

    Maximum of 250 characters.